In recent days, there have been heated discussions on the cornerstone investment and valuation range of the millet. It is undeniable that the continuous voice reflects the market's high attention to Xiaomi.
We learned from a well-known investment agency that Xiaomi’s listing arrangements are as follows:
From the above table, we can see that Xiaomi will be listed on the Hong Kong Stock Exchange on July 9th and the CDR will be issued after July 16th. The signing date of the cornerstone document is June 16th. Before this time, there will be no cornerstone. In the valuation range, there will not be a determination of the share of the base stone. At present, everyone only needs to wait quietly.
As one of the most successful companies in the world for the past eight years, Xiaomi has huge users and fans. Xiaomi’s listing is also highly hopeful. So, what about Xiaomi?
Soft and hard business model
From the business model, the biggest change in hardware companies over the past few years has been the realization of 'soft and hard'.
Hardware and software are indispensable. The earliest motivator for this business model was Apple. Apple's real moat is its IOS system, its entire software service and iCloud. The cost of getting users out of the Apple ecosystem is getting higher and higher. The service sticks to customers, and Apple has the pricing right on the mobile phone. So there are two types of mobile phones in the world: Apple and non-Apple. Apple's gross profit margin is extremely high, and it also accounts for the vast majority of the global mobile phone industry's profits.
Xiaomi has similarities with Apple in the business model. He not only has Xiaomi's mobile phone as hardware, but also provides his own system, cloud services, and Internet software applications.
Xiaomi has always been the domestic mobile phone producer with the deepest research on the Apple model. From the SKU of control products, to self-built offline and online sales channels. Unlike Apple, which relies on hardware charges and free software, Xiaomi sells hardware at a cost price. Then make money through the user's software to pay. Of course, today's Xiaomi hardware phone has also been profitable. And based on Xiaomi's software operating system, derived a series of other hardware products.
The rise of Xiaomi also broke into the entire mobile Internet traffic bonus.
The entire Chinese demographic dividend lies in the long-tailed crowd. These people are sensitive to cost-effectiveness. In the past, these people would buy some cottage mobile phones and even the so-called 'red and white machines'. Appeared, began to erode the market share of a large number of cottage mobile phones. Also in this round of mobile Internet traffic bonus eruption, the domestic mobile phone industry completed a new reshuffle. The past TCL, Bird (fighters in mobile phones), Amoi, Lenovo and others gradually faded out of our vision and replaced them with Xiaomi, Oppo, Vivo, Huawei, etc. We have found that the concentration of the entire brand has become more concentrated.
And from the sales model, Xiaomi learned the 'Dell' model very early.
When the PC Internet era traffic broke out, Dell was very smart to go through the middle of the channel and give it to the users. In that era, the traditional computer vendors HP and Compaq were still in Best Buy, and Circuit City (the financial crisis collapsed). Inside the electronics store, it sells and sells. Dell sells directly through internet channels, and the price is cheaper, thus completing the leap in market share.
Using mobile phone as a channel, Xiaomi’s new retail thinking
Since the establishment of Xiaomi, there has been a strong Internet gene, which has a deep understanding of the value of channels and its ills. So in the future we think that Xiaomi may be a mobile phone as a channel to build its new retail empire.
Today through many years of hard work, Xiaomi already has more than 190 million MIUI system monthly live users. And from a millet mobile phone user's point of view, the stickiness is still very high. Especially cloud service, letting you all your contacts, photos of Storage, personal information, etc. are all stored in the Xiaomi cloud. The old users continue to precipitate, new users are slowly growing up, and a kind of 'compound interest' is realized at the user end.
Once the mobile-channel model has a scale effect, users can purchase large quantities of millet merchandise on the Xiaomi mobile phone.
From a retail point of view, the more intermediate channels, the higher the gross margin of goods must be. From the Sino-US retail comparison, it is found that the US dealer network is more flat and the Chinese dealer network is more hierarchical. This leads to Chinese consumer goods companies. The gross profit must be very high in order to be divided into different levels of distributors. Because the United States does not have too many intermediate links, the overall gross profit margin is about 40-50% lower than in China. At the same time, too many channels are too far away from consumers. It also led domestic consumer goods companies to value channel value rather than user experience.
At this point, Xiaomi is equal to the 'self-built channel' and removes the traditional intermediate links.
Leading its products without the need of high gross profit margins, it can still make profits and give profits to customers. At the same time, Xiaomi began to expand its offline experience stores to allow users to experience all kinds of electronic products. However, the entire offline experience stores still use 3C. The main product, and millet's online shopping has become a multi-category channel.
Xiaomi's new retail mentality ultimately hopes to achieve the ultimate user experience: high cost performance, low SKU, every product is a fine product, and it is also highly competitive at the price. This is not the same as Netease’s strict selection model. Netease is more of an OEM model for ODMs. So Xiaomi is more like a Costco way of thinking. It uses low gross margins and low SKUs to gain long-term user stickiness. We have also done analysis on Costco. It is the US retail industry in the past 10 years. A few companies have seen rising stock prices.
From the company's genetics, millet also has the ultimate Internet thinking.
Lei Jun is an ordinary person who does not have a good eloquence. However, he has been working hard to do things. Xiaomi's product positioning is 'moving people's hearts, price and kindness'. Xiaomi promises that the future gross profit margin of hardware will never exceed 5%, to provide users with the ultimate Product experience and over cost performance. Millet has always been a moving company. Almost every product is done with heart and soul. It is not a pit father. Millet is also the only company in the world that can resume growth after sales decline.
Can not help but think of Lei Jun's words. Kind man is not too bad luck.
Millet and Lei Jun have created greatness. This is the best time, an era that makes good people earn money.